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IPI in Brazil: the federal excise tax on industrialized products and its 2027 phase down

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Last verified: 2026-10-27 · Status: Changing

IPI is a federal tax on industrialized products, charged when a product leaves a manufacturer or an importer's establishment and on customs clearance of imports, at rates set product by product in the TIPI table. It is selective by essentiality and non cumulative, does not apply to exports, and the Executive may cut rates to zero or raise them by up to 30 points by decree. Under Constitutional Amendment 132/2023, IPI rates fall to zero from 2027 except for products whose manufacture is incentivized in the Manaus Free Trade Zone, as the selective tax and the CBS take over.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.5007 per US dollar for 26 October 2026, the latest rate published when this page was verified. Conversions are for orientation only; the rate on the day of each FX contract will differ.

Key facts

Maximum IPI rate increase the Executive may decree over the TIPI rate30 percentage pointsDecree 7,212/2010 art. 69, as of 2026-10-27 · in force
IPI on industrialized products exported0 (outside the tax) %Constitution art. 153 § 3 item III, as of 2026-10-27 · in force
Year from which IPI rates fall to zero (except Manaus Free Trade Zone incentivized products)2027 yearConstitutional Amendment 132/2023, ADCT art. 126 item III, as of 2026-10-27 · pending
Maximum selective tax rate on extraction, share of market value1 %Constitution art. 153 § 6 item VII, as of 2026-10-27 · pending

The rule

1. IPI design: the tax is selective according to how essential the product is; non cumulative, so the tax due on each operation is offset by the tax charged on earlier ones; does not apply to industrialized products exported; and its impact on purchases of capital goods must be reduced as the law provides. The Executive may change IPI rates within legal limits.Constitution of the Federative Republic of Brazil of 5 October 1988, Art. 153 item IV, § 1 and § 3 items I to IV, 1988-10-05 official text · verified 2026-10-27
2. Scope: IPI applies to industrialized products, domestic or imported, as listed in the TIPI table, including those at zero rate and excluding items marked NT (not taxed). Industrialization means any operation that changes nature, function, finish, presentation or purpose, or improves a product for consumption: transformation, improvement, assembly, packaging or repackaging, and renewal or reconditioning.Decree 7,212 of 15 June 2010 (IPI Regulation, RIPI), Arts. 2 and 4, 2010-06-15 official text · verified 2026-10-27
3. Who pays as a manufacturer: importers that release foreign products for sale are treated as industrial establishments, so the resale of imported goods is taxed again on exit from the importer's establishment, with credit for IPI paid on clearance.Decree 7,212/2010 (RIPI), Art. 9 item I, 2010-06-15 official text · verified 2026-10-27
4. Taxable events: customs clearance of a product of foreign origin, and exit of a product from an industrial or equivalent establishment.Decree 7,212/2010 (RIPI), Art. 35, 2010-06-15 official text · verified 2026-10-27
5. Non incidence: books, newspapers, periodicals and the paper used to print them; products exported; gold as a financial asset; and electricity, petroleum derivatives, fuels and minerals of the country are outside IPI.Decree 7,212/2010 (RIPI), Art. 18, 2010-06-15 official text · verified 2026-10-27
6. Rates and their flexibility: rates are those of the TIPI table; the Executive may reduce them to zero or raise them by up to 30 percentage points for economic policy reasons, keeping selectivity by essentiality.Decree 7,212/2010 (RIPI), Art. 69, 2010-06-15 official text · verified 2026-10-27
7. Tax base on imports: the value that serves as the base for import duty at clearance, plus the import duty itself and exchange charges actually paid or owed by the importer.
Example: Customs value R$100,000 plus import duty R$14,000: IPI base R$114,000; at an assumed 10 percent TIPI rate, IPI R$11,400 / Same import: base US$20,724.64, IPI US$2,072.46Decree 7,212/2010 (RIPI), Art. 190 item I, 2010-06-15 official text · verified 2026-10-27
8. Reform: from 2027 IPI rates are reduced to zero, except for products whose industrialization is incentivized in the Manaus Free Trade Zone under criteria set by complementary law, and IPI may not be charged cumulatively with the selective tax (IS). The CBS and the IS start in 2027.Constitutional Amendment 132 of 20 December 2023, ADCT art. 126 items I and III (inserted by art. 2), 2023-12-20 official text · verified 2026-10-27 · changed: Constitutional Amendment 132/2023 set IPI to zero from 1 January 2027, save for products incentivized in the Manaus Free Trade Zone.
9. Selective tax replacing part of IPI's role: from 2027 the federal selective tax applies to production, extraction, sale or import of goods and services harmful to health or the environment. It does not apply to exports or to electricity and telecommunications, applies only once per good or service, and its rates are set by ordinary law, specific or ad valorem; on extraction it is capped at 1 percent of market value.Constitution, art. 153 item VIII and § 6, inserted by Constitutional Amendment 132/2023, Art. 153 item VIII and § 6 items I to VII, 2023-12-20 official text · verified 2026-10-27
PeriodIPIRelated change
2026TIPI rates applyCBS and IBS test year
From 2027Zero, except products incentivized in the Manaus Free Trade ZoneCBS replaces PIS and COFINS; selective tax starts

IPI from 2026 onward (Constitution art. 153; Constitutional Amendment 132/2023 ADCT art. 126)

Worked example

  • An importer clears goods with a customs value of R$100,000 and import duty of R$14,000. With an assumed TIPI rate of 10 percent (rates vary by product code), IPI on clearance is R$11,400 (US$2,072.46). When the importer resells, it charges IPI again on its sale price and credits the R$11,400 paid at customs.
  • A manufacturer exporting its output charges no IPI on the export and, under the non cumulative design, keeps the credits on its inputs.

Step by step

  1. 1. Classify each product under the NCM code and look up its rate in the TIPI table; check for NT items and zero rates.
  2. 2. Register as an IPI taxpayer if you manufacture, or if you import and resell (treated as industrial).
  3. 3. Track credits for the IPI charged on earlier operations, including IPI paid on clearance, to offset the IPI due on sales.
  4. 4. Model 2027: IPI goes to zero outside Manaus incentivized products, while the CBS and the selective tax begin; review pricing and inventory credits.

Common traps

  • Importers who resell are taxed as manufacturers, so IPI is due both at customs and on the resale.
  • Rates change by decree; check the TIPI version in force on the date of each operation.
  • Products made in the Manaus Free Trade Zone keep IPI relevance after 2027, because the zero rate excludes products incentivized there.
  • The selective tax rates are set by ordinary law; do not assume IPI rates carry over.

Sources

Related pages

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